The bankrupt city of Stockton has gone public with its Plan of Adjustment - that is, who gets skinned for $1.1 billion in debt and who does not.

Let's look at the deals.

The mother of all haircuts has long looked to be the one given to Stockton's 1,100 public employee retirees. Their free lifetime medical care was a $545 million unfunded liability.

Retirees now get $5.1 million - about one penny on the dollar.

It may be cold comfort to them, but Stockton is taking a big risk to preserve their pensions. Another creditor, Franklin Funds, is taking the city to court over that decision.

Only Franklin stands to surpass city retirees in the Stockton Scalp-O-Rama. After loaning the city $35.1 million for "public-safety facilities and construction of seven parks ...", Franklin is being offered $93,578.

About a quarter-penny on the dollar.

Franklin refused to cut a deal with the city in pre-bankruptcy AB506 negotiations. It also refused to cut a deal in bankruptcy mediation. It appears that Franklin's legal posture backfired.

Now it has nothing to lose by going to court.

A key consideration in the city's treatment of Franklin, as well as other creditors, is collateral.

As collateral to Franklin's loan, the city put up Swenson and Van Buskirk golf courses, and the public facilities at Oak Park: ice rink, ballpark, swimming pool and tennis courts.

All of which lose money.

"Creditors other than Franklin can look to leases secured by assets that are essential city facilities, such as police and fire stations," explained city spokeswoman Connie Cochran. "The leases that secure the obligation to Franklin are of desirable but not essential properties."

Translation: A police station we gotta have. An ice rink not so much.

Especially since the city does not really stand to lose this collateral; it merely stands to lose the "lease hold." The city would continue to own the assets. Franklin would control them pending another resolution.

So, hard-nosed Franklin stands to gain control of numerous money holes. You wonder if some on Franklin's board are entertaining doubts about their strategy.

Collateral also explains why the city proposes to repay the NPFG in full for its $45.1 million arena bond, its $31.6 million bond to build the Coy garage and Events Center garage and its $12.1 million bond for the Stuart Eberhardt police annex.

Theoretically, the city could walk away from the arena. But the successor to its redevelopment agency still has to pay back millions in property tax money spent on the arena anyway.

The police annex is essential. And the collateral for the two garages are three garages, the Market Street garage included. They make money.

A win-win deal is the agreement with Assured Guaranty. Assured loaned the city $124.3 million to fund pensions. It also loaned the city $45.1 million to buy a new City Hall building at 400 E. Main St.

Assured repossessed the building but craves a stable tenant. City government needs a new City Hall. Assured will wipe out the $45.1 million debt and give the city a bargain lease through 2022. In so doing, Assured transforms a white elephant into a marketable property and a revenue stream.

The building deal made Assured nicer about the pension bond. The city will pay back at least 52 percent in ways that don't compromise the General Fund. If city revenues go way up in the future, Assured gets a piece of them.

For the Stockton Thunder hockey team, the city raised its rent and changed other terms. That will reduce the arena's annual operating deficit by $200,000.

The Stockton Ports baseball team, like Franklin, is a holdout. But it is highly unlikely the Ports will give up that beautiful ballpark. Expect a deal.

The state of California, which loaned the city $10.6 million to build its fancy marina, says the city may repay the loan when it can. But not from the general fund.

Stockton has spent a painful $14 million on legal fees and fiscal consultants. But its Plan of Adjustment will save $1.1 billion, three-quarters of which would have come out of the same general fund that pays for police, fire, libraries, roads and so forth.

The only joker in the deck is Franklin. It is now arguing, among other things, that the city's Plan of Adjustment is a return trip to bankruptcy. Only it can undermine the city's agreements with creditors should it prevail in court.

Contact columnist Michael Fitzgerald at (209) 546-8270 or michaelf@recordnet.com. Follow him at recordnet.com/fitzgeraldblog and on Twitter @Stocktonopolis.